India enacts Income Tax Act 2025 and merges Forms 15G and 15H
Change
India enacted the Income Tax Act, 2025 effective April 1, 2026, replacing the Income Tax Act, 1961, consolidating TDS exemption declarations into a single Form 121, renaming Form 26AS to Form 168, and reducing Liberalised Remittance Scheme TCS to 2% for qualifying education, medical and tour-package remittances above ₹10 lakh.
Why it matters
Tax authorities now have a consolidated, machine-readable view of taxpayers' financial activity, increasing the chance that automated matching will identify unreported income or inconsistencies. Individuals with undisclosed foreign assets face a six-month voluntary disclosure window to regularise holdings or risk enforcement action.
Implications
- • Resident individuals remitting funds overseas for education or medical treatment above ₹10 lakh in a financial year must pay 2% TCS when initiating the transfer.
- • Authorized dealer banks' outward remittance desks must collect 2% TCS on qualifying Liberalised Remittance Scheme transactions and remit it under Section 206C(1G).
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